Canada's roller-coaster ride of job creation continued in August with a job gain of nearly 60,000, nearly three times as much as economists were expecting. This drove the unemployment rate back down to 7.1%, a 10-basis-point improvement from July. However, over the past six months to August, employment gains averaged 12,000 per month, lower than the average of 29,000 observed during the preceding six-month period. The number of hours worked in August grew 1.3%.
The other negative is that more than 70% of the jobs added were of the part-time variety. Alberta and Ontario were the biggest gainers from a provincial perspective, while Quebec and Manitoba took a step backward. Housing starts fell 7% sequentially in August to 180,291 units, with multiple-unit buildings in urban areas having the biggest decline (more than 8%). Worse yet, the starts were down more than 20% from the year-ago period. With the housing market struggling and economic growth continuing to slide (second-quarter GDP growth was down 50 basis points sequentially to 1.7%), we doubt the Bank of Canada will raise interest rates anytime soon. Interest rates have held steady at 1% for the past three years.
